US consumer confidence fades further in August

WASHINGTON: US consumer confidence continued to decline in August, dropping below the level seen in the early weeks of the pandemic as coronavirus cases soared, according to a survey published on Tuesday.

After declining in July, the Conference Board Consumer Confidence Index fell to 84.8 in August from 91.7 the previous month as opinions worsened regarding the current situation and the near-term outlook.

Lynn Franco, chief economic indicators director at the Conference Board, said the study showed that attitudes about "business and working conditions have deteriorated over the past month."

"Consumers' optimism about the short-term outlook and their financial outlook has also retreated and continues in the downward trend," Franco said.

While spending has recovered in recent months, "growing concerns among consumers about the economic outlook and their financial well-being will likely lead to a cooling in spending in the coming months."

With the White House still unable to resolve its impasse with Democratic leaders in Congress over a new spending package after expanded unemployment benefits and other aid measures expired at the end of July, respondents were more pessimistic about their job prospects as well.

Optimism picked up in June as pandemic shutdowns appeared to be working, but as more businesses reopened and the debate over mask use turned political, the country saw a spike in COVID-19 infections in July.

The pandemic has now claimed nearly 180,000 lives in the world's largest economy, and August was marked by several aborted attempts by major universities to reopen their doors as usual, forcing them to return to online lessons.

"We suspect that the still widespread COVID-19 infection undermines confidence, and the expiration of federal unemployment benefits weakens morale," said Cathy Bostancic of Oxford Economics in an analysis.

The survey showed that a smaller percentage of consumers expected more jobs in the coming months while a higher percentage expected their incomes to decline.

"Families are becoming more cautious in their outlook for continued recovery in the economy," Bostancic said.

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